Price Hikes Not in the Recipe at Domino’s

Consumers are still not ready to pay more for pizza. But they may be willing to add wings or dessert to their order.

Domino's Pizza is grappling with higher supply chain costs and other expenses, but the pizza chain doesn’t plan on raising prices.

“I don’t think you can take aggressive price in this economy right now, and not expect that it’s going to hit your order counts,” said Domino’s chief financial officer Jeffrey Lawrence Thursday during an earnings call with analysts.

So far lower commodity prices are partially offsetting the expense, Mr. Lawrence said. The average price of a pound of cheese was $1.69 in the third quarter, compared with $2.04 during the year ago quarter. Adding more food to an order increases profitability he said, so the Domino’s is trying to upsell more menu items to customers.

“Customers are smarter today, more careful about how they’re spending their money post the downturn in 2008, 2009, and that hasn’t changed,” he added. “They’ve got access to more pricing information. They’re making smarter decisions.”

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